November 11, 2024 - (Gold Market Wire) - The maelstrom of the US Presidential election has passed - and the Dollar is surging. Currently, it looks like we are approaching an inflection point which will see the Pound and the Euro begin a new, downward, trajectory against the US Dollar. The force of this, on the back of both a Trump victory, and a seemingly decided intention by Europe to commit suicide, economically, is now in full flow. Gold cannot rally in such a situation.

It cannot be denied that some of the risk premium is coming out of Gold, after its enormous rally, on the back of a Trump election that increases the chances of a resolution to the Russian/Ukraine conflict. Ukraine has now been soundly defeated, and the Trump administration, when it arrives, will likely promote a peace initiative which makes major concessions to the recent Russian territorial advance. If, as some think, a joint French/British inclination to provide further long-range missiles to Ukraine - by which to strike deeper into Russia - succeeds, Europe may have signed its death warrant.

Short of an American supplied NATO, no combination of European forces has any significant chance to take on the Russian military. It is a fools' errand - and right now both France and the UK seem to have many fools.

We are out of the market and scaling back the core position. Gold is in the doldrums and the sell-off we were looking for two months ago has finally materialised, albeit later than we expected. This down move in Gold is likely to be intermediate in nature. Right now, the play is to short the Euro and Sterling, and shedding a decent chunk of the core Gold position will provide the ammunition.